Coates Hire refinances $1.9 bn of debt

The general hire company is a potential IPO candidate for the new year.

Coates Hire Ltd has signed documents to extend its $1.88 billion credit facility to September 2017 while increasing the flexibility to pay dividends to its owners, US private equity giant the Carlyle Group and equipment hire company National Hire Group Ltd.

The amend and extend agreement with a syndicate of 25 banks left the pricing on the loan unchanged at 300 basis points over the Australian 90 day bank bill swap rate. Coates’ debt-to-earnings before interest, tax depreciation and amortization is at 3 times.

Next year Coates, Australia’s largest general hire company, will be a possible initial public offering candidate. Its owners are also entertaining takeover offers. Carlyle and National Hire Group each own 50 per cent of Coates following a January 2008 buyout.

Coates’ major creditors are: Westpac Banking Corp, Sumitomo Mitsubishi Banking Corp, ANZ Ltd, Mizuho Financial Group Inc, Development Bank of Japan, National Australia Bank Ltd and Commonwealth Bank of Australia Ltd.